INTRODUCTION

The term ‘anti-suit injunction’ can be defined as an order of a court, requiring the
injunction defendant not to commence, or to cease to pursue, or not to advance a
particular claim(s), or to take steps to terminate or suspend, court or arbitration
proceedings in a foreign jurisdiction. The concept of anti-suit injunctions are said to
have evolved from the ordinary injunction, which used to be granted by the English
Courts of Chancery when the English Common Law Courts’ judgment violated the
principles of equity. The earliest instance of granting such injunction can be traced
back to the 17th century case of Love v. Baker wherein the court for the first time
granted such injunction. However, such injunctions did not become common till the
19th century when the British courts started granting injunctions to restrain
proceedings in other jurisdictions under the British Empire. Similarly, the concept of
granting anti-suit injunctions also developed in the United States of America
(hereinafter the U.S.) courts in the early 19th century wherein such injunctions were
used to restrain parties from instituting suits in different states within the U.S. for

the same cause of action. It is only after the 1970s did the U.S. courts started
issuing international anti-suit injunctions. Today, anti-suit injunctions have grown as
a remedy not only in common law jurisdictions, but also in civil law jurisdictions
such as Brazil, Venezuela and others.1 With growing complexity in international
disputes and their resolution mechanisms, international commercial arbitration has
become a fertile landscape for anti-suit injunctions, notwithstanding the lack on

statistics on this regard. Anti-suit injunctions are granted either by the arbitrators to
preserve the jurisdiction of arbitral tribunals, to safeguard the effectiveness of the
award and to prevent the aggravation of the dispute whereas such injunctions are
granted by domestic courts to favour or prevent arbitration. Such injunctions can be
granted at any stage of the proceedings.

1
Emmanuel Gaillard, Anti-suit Injunctions Issued by Arbitrators, in INTERNATIONAL ARBITRATION 2006: BACK TO BASICS? 235,
235 (Albert Jan Van Den Berg 2008).
1. Anti-Suit Injunctions Ordered by Arbitrators

Arbitration being a consensual method of dispute resolution, parties are free to

determine through their agreement whether the tribunal shall possess the powers to
grant an anti-suit injunction or not. If the parties fail to determine such powers, then
the same shall be governed by the curial law of the arbitration proceeding, i.e., the lex
arbitri. Several conventions which have been adopted by states in their domestic
arbitration statues do not provide for a remedy of anti-arbitration injunction. E.g., the
New York Convention does not mention whether the arbitrators have a power to grant
anti- suit injunction. Similarly, the UNCITRAL Model Law also does not specifically
address this issue. However, it is argued that by virtue of Article 17 of the Model
Law, which provides for the power of arbitral tribunal to order interim measures,
recognizes the power of arbitrators to grant anti-suit injunctions. The argument in
light of the amendment made in 2006 to the aforesaid provision after specifically
considering the issue of the arbitrators’ power to issue anti-suit injunctions. 2
Similarly, the ICC Rules of Arbitration are also silent about this issue, although
authors recognize the roots of this power in the principle of kompetenz-kompetenz
read with Article 6(2) and Article 23(1) of the Rules which recognize the principle of
kompetenz-kompetenz and the power of the tribunal to order any interim measure it
deems appropriate respectively.3 The power to determine one’s own jurisdiction includes the
power to protect the same and to issue all such orders and directions to this end.

2. Anti-Arbitration Injunctions Ordered by Courts

Apart from the arbitrators, courts also exercise their powers to grant such injunctions,
which do not face the same set of problems as faced by the arbitrators, but raise a set
of serious questions regarding international comity and sovereignty, especially when
such injunctions are granted to stop proceedings in another state. Injunctions granted

2
UNCITRAL Model Law on International Commercial Arbitration art. 17, available at
http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1985Model_arbitration_status.html

3
BALCO v. Kaiser Aluminium (2012) 9 SCALE 333
 by the courts can further be classified into two parts, namely (i) injunctions to prevent
arbitration (ii) injunctions to favour arbitration.

(i) Injunctions to prevent arbitration

These are the most common types to injunctions granted by courts in relation to
arbitration proceedings wherein, the courts order restrains the implementation of
arbitration proceedings or prevents actions for the enforcement of arbitral awards.
Such injunctions are more commonly known in common-law countries as ‘anti-
arbitration injunctions.’ When issued in relation to the international arbitrations, such
injunctions have the effect of precluding arbitration proceedings with ‘seat’ outside
its territory, thereby violating the rule of territoriality. It is owing to this feature of
such injunctions supporters of international arbitration have strongly criticized courts
for granting such injunctions.4

(ii) Injunctions made in favour of Arbitration

As already submitted, courts have limited powers to interfere with arbitrations, but
anti-suit injunctions in favour of arbitrations are highly useful to ensure that parties
stick to their agreed obligations to settle their disputes by arbitration. This is all the
more useful in the sense that arbitral tribunals have no imperium to enforce their own
awards, thereby making such injunctions the call for the day to protect arbitration
process from abuse. To this end, several domestic arbitration legislations make it
obligatory for courts to refer such matters to arbitration. The basis for these provisions
can be found in the New York Convention5 as well as the UNICITRAL Model Law,
wherein assistance by courts in favour of arbitration has been prescribed, such as:

Article 5: Extent of court intervention in matters governed by this Law, no court shall
intervene except where so provided in this Law.

Article 6: Court or other authority for certain functions of arbitration assistance and
supervision
4
Ricardo Quass Duarte, Anti-Suit Injunctions in the Context of International Commercial Arbitration
5
New York Convention, 1958
 The functions referred to in Articles 11(3), 11(4), 13(3), 14, 16(3) and 34(2) shall be
performed by ... [Each state enacting this model law specifies the court, courts or,
where referred to therein, other authority competent to perform these functions.]
Article 9: Arbitration agreement and interim measures by court It is not incompatible
with an arbitration agreement for a party to request, before or during arbitral
proceedings, from a court an interim measure of protection and for a court to grant
such measure.

Article 17 J: Court-ordered interim measures A court shall have the same power of
issuing an interim measure in relation to arbitration proceedings, irrespective of
whether their place is in the territory of this state, as it has in relation to proceedings in
courts. The court shall exercise such power in accordance with its own procedures in
consideration of the specific features of international arbitration. It is submitted that a
reading of the aforesaid provisions provides an idea about the type of assistance that
can be provided by courts in favour of arbitration. Further, the courts can grant anti-
suit injunctions with respect to arbitration in two stages, namely (i) during the
arbitration proceedings, when the recalcitrant party seeks an action at another court to
disrupt the ongoing arbitration proceeding and to avoid that an award is made; (ii) after
the award is made, the losing party tries to institute court proceedings to avoid
enforcement of the arbitral award or to recover what was paid in connection with the

enforcement of an award.86 In both these scenarios, the losing party may seek to set
aside the award or prevent arbitration process by seeking an anti-arbitration
injunction, wherein the opposite party may seek an injunction in favour of the
arbitration proceeding.

3. Anti–Arbitration Injunctions: An Indian Perspective

There is no specific provision in the Indian Arbitration and Conciliation Act, 1996 to
empower courts to grant anti-suit injunctions. In fact, some argue that few provisions
of the Specific Relief Act, 1963 prohibit the granting of such injunctions. Section
41(b) of the Specific Relief Act provides that: ‘An injunction cannot be granted… to
restrain any person from instituting or prosecuting any proceeding in a court not
 subordinate to that from which the injunction is sought…’ 6 A literal interpretation of
the said section would mean that a court could only grant an anti-suit injunction in a
matter involving a court subordinate to it. Thus, the Delhi High Court can grant an
anti-suit injunction in relation to a matter in a court subordinate to it, but not to a
court subordinate to the Madras High Court. A simple extension of the same would
mean that no such injunction could be granted against a foreign arbitration as no
foreign court is subordinate to an Indian Court. One way to overcome the same is by
construing the term “court” to mean an “Indian court”. This seems to be the approach
adopted by the Madras High Court in the case of Rajshree Sugars v. Axis Bank7,
where the Court held: “Thus, Cotton Corporation case was distinguished in Oil and
Natural Gas Commission case, to the limited extent of recognizing the power of the
courts to grant anti-suit injunctions despite the principle of subordination of courts,
found in Section 41(b) of the Specific Relief Act, 1963.”

In the context of the Arbitration and Conciliation Act, 1996, the rule of kompetenz-
kompetenz as enshrined in Section 16 of the Act empowers the arbitral tribunal to rule
on its own jurisdiction. To this end, Section 8 of the Act makes it obligatory on courts
to refer parties to arbitration where the court finds that there exists a valid agreement to
arbitrate disputes between the parties. However, Section 9 and Section 45 of the Act
provides certain powers to the court to interfere with such proceedings in domestic and
foreign arbitrations respectively. Section 9 empowers the court to grant interim
remedies in support of arbitration during the pendency of the proceedings whereas
Section 45 of the Act requires the court to refer parties to arbitration unless it
finds the arbitration agreement to

Although there is no provision in Part II of the Act like Section 34 of the Act and the
Supreme Court in BALCO v. Kaiser Aluminium8 has held that Section 34 is not applicable

to foreign arbitrations,98 which empowers the courts to set aside foreign arbitral
awards, Section 45 still seeks to limit the costs of parties who contest that there exists
no valid arbitration agreement, as getting such declaration from the courts of the seat
6
The Specific Relief Act, 1963 § 41(b).
7
2008 SCCOnLine Mad 746.
8
(2012) 9 SCC 552
 of arbitration may be costly. It is submitted that this rule under Section 45 is subject
to the general principle of kompetenz-kompetenz governing arbitration, which although
present only in Part–I of the Act, is a general principle in the New York Convention and
governs all arbitrations.9 Thus, courts as a general rule refuse to interfere with arbitral
proceedings where parties have willingly agreed to arbitrate disputes with one another.10

The Andhra Pradesh High Court in Cultor Ford Science v. Nicholas Piramal 11,
refused to grant an injunction against arbitration under the LCIA Rules as the parties
had willingly entered into the agreement and had spent a considerable amount of
money in participating in the proceedings. However, in conditions where the court
deems it necessary to intervene, injunction is granted against commencing the
arbitration proceeding. The Delhi High Court in Union of India v. Dabhol Power,12
held that the Section 45 does not oust the jurisdiction of the court from issuing an
injunction if the proceedings are found to be oppressive, which essentially means that
the courts have powers to grant injunctions against arbitral proceedings, in cases
where it deems it necessary. The Bombay High Court in MSM Satellite (Singapore)
Pvt. Ltd. v. World Sport Group (Mauritius) Limited 13 granted injunction against a
foreign arbitration between two foreign parties in which the subject matter of the
dispute was in India.
Thus, from the above discussion, it is submitted that courts in India possess a limited
power to grant anti-arbitration injunctions, subject to Sections 8 and 16 of the Act.
Such powers should be used by the courts only in extreme cases where the balance
of conveniences is strongly in favour of granting such injunctions and such
injunctions propel the end of preventing abuse of process of arbitration to frustrate the
other parties’ claims.
A RAY OF HOPE: RECONSIDERATION OF THE BHATIA DECISION BY THE
SUPREME COURT IN BHARAT ALUMINIUM V. KAISER ALUMINIUM.

9
Shin-Etsu Chemical Co. Ltd. v. M/s Aksh Optifibre Ltd. & Anr. (2005) 7 SCC 234
10
Shakthi Bhog Foods Ltd. v. Kola Shipping Ltd., (2009) 2 SCC 134.
11
Cultor Ford Science v. Nicholas Piramal, 2002 (1) ALD 154.
12
MANU/DE/0379/2004.
13
MANU/MH/1112/2010.
The Supreme Court needs to adopt a ‘pro-arbitration’ stance to provide fast, efficient and
predictable remedies to foreign investors. In cases involving foreign arbitral disputes, the
Supreme Court has consistently revealed an alarming propensity to exercise authority in a
manner contrary to the expectations of the business community. Observed in this light, the
Chief Justice of India’s recent decision to constitute a constitutional bench to hear
challenges to the Court’s earlier parochial rulings opens the most important chapter in the
legal battle to convert the Indian judicial system into a pro-arbitration regime. The
constitutional bench reference was made in the case of Bharat Aluminium Co. v. Kaiser
Aluminium Technical Services Inc. A two-judge bench of the Supreme Court had earlier in
this case expressed reservation on the correctness of the operating precedent laid down in
Bhatia International v. Bulk Trading S.A. (Bhatia International), and subsequently followed
in Venture Global Engineering v. Satyam Computer Services (Venture Global) and other
cases. Thereafter, in accordance with judicial discipline and propriety, the two-judge bench
referred the matter to a three-judge bench setting out the reasons why it could not agree
with the three-judge bench operating judgment in Bhatia International. Later, the three-
judge bench, which also included the Chief Justice, also came to the conclusion that the
ruling in Bhatia International needs to be reconsidered by a five- judge bench.14

The Latest Development

14
A second look at arbitration, The Hindu, http://www.thehindu.com/opinion/lead/article2735659.ece?homepage=true .
 The McDonald Case15
Powers of the Supervising National Courts Even though arbitration is a private dispute
resolution mechanism, the national courts are given the powers to supervise the arbitrations. The
said power also includes appointment of arbitrators, interim orders, replacement of arbitrators,
recognition and enforcement of arbitration awards etc., These powers are exercised as per the
procedural law applicable to the seat of arbitration. Many Countries have taken away the
applicability of Civil Codes to arbitrations. But still Courts have certain powers by way of inherent
jurisdiction or powers of equity or civil code, which are invoked by parties while seeking anti-
arbitration inunctions.
There was an arbitration clause between McDonald and the Indian parties in their JV
agreement which provided for a London seated arbitration with Indian laws as applicable laws.
The Indian parties chose to file applications before the company law tribunal seeking to restrain
McDonald from indulging in oppressive actions and mismanagement of the JV. McDonald
initiated the arbitration in London. The Indian parties filed a suit seeking an injunction against
the London seated Arbitration on various grounds including forum Non Conveniens, pendency
of Multiple proceedings on the same subject matter, waiver by Mc Donald of its right to
arbitrate by withdrawing an application before the Company Law tribunal, inoperative
arbitration clause etc.,. The Single Judge came to a conclusion that the arbitration clause having
Indian laws as applicable laws, cause of action arose in India, except one party all are from India
and hence having the arbitration in London is a forum inconvenience and hence granted the
injunction against the London seated arbitration.

Hence Mc Donald filed an appeal before the Division Bench and the judgment of which is the
subject matter of the present Appeal. The following are the main issues arose in the said case:

Forum Non Conveniens is the first contention raised by the petitioner before the Single Judge of
the High Court. The doctrine of Forum inconvenience is a doctrine, invoked by the defendants
while there are two courts having jurisdiction over the subject matter and the plaintiff has
chosen an inconvenient forum to file his suit. Hence on the application of the defendant the
Court in which the matter is pending may decide either to continue with the case or to transfer

15
(2016) SCC online Del 3949
 the same to the other Court. Hence it can be understood that the court in which the case is
pending, decides whether to continue or not. But in the present case Single judge wrongly used the
said doctrine for issuing injunction against a proceeding which is not before him, which is not
permissible. More over Non Conveniens is governed is essentially an equitable common law
principle but in India it is governed by Code of Civil Procedure hence defendant could have
invoked Section 24 and 25 of CPC. But it is important to note that a Court in India cannot
refuse to entertain the case filed before it, if it also has jurisdiction over the subject matter of
the case.

The Division Bench held that no court has powers to grant injunction against an arbitration,
when the said arbitration agreement is a valid one. The valid arbitration agreement is one
which is neither null and void, nor inoperative or incapable of being performed. The court also held
following World Sports Group vs MSM Satellite (Singapore) PTE limited16 Judgment that the
existence of multiple legal proceedings can also not a valid reason for granting an anti-arbitration
injunction. The Division Bench further held that the Indian courts have the powers to grant anti-
arbitration injunction under the provisions of Code of Civil Procedure, only when the
arbitration clause is null and void or inoperative or incapable of being performed. The said
finding was given by court because of S. 45 of the Arbitration and Conciliation Act, 1996 that
mandates reference to arbitration unless “it finds that the said arbitration agreement is null and
void, inoperative or incapable of being performed” which is the reflection of Article II of the New
York Convention on recognition and enforcement of Foreign awards.

CONCLUSION

16
(2014) 11 SCC 639
India is still a litigation country and people are more comfortable with litigations than other
modes of dispute resolution. But Arbitration is also a popular, private and alternate dispute
resolution mechanism and it is Governed by Arbitration and Conciliation Act, 1996 in India.
After the 1996 Act and more particularly after 2015 Arbitration and Conciliation (Amendment)
Act, it is also being considered as one of the progressive arbitration country in Asia. But the anti
– arbitration injunctions issued by Indian National courts have always created a bad PR, since it
always creates a doubt about the consistency of judicial verdicts on arbitration related litigation
matters. One of such recent case which created a controversy was an anti- arbitration injunction
issued in McDonald case, restraining an arbitration seated in London. Even though the said
injunction issued by the single Judge was revoked by the Division bench of the High Court, it
created a lot of ripples in the arbitration circles across the world. Hence the endeavor of the
author in this article is to analyze the powers of the Indian Courts to grant such anti arbitration
injunctions against both India and Foreign seated arbitrations.

Bibliography
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2. A Comparative Analysis Of The Law Relating To Anti- Arbitration Injunctions By Mr. K.R.
Avinash

3. Arbitration and Conciliation Act, 1996 & Arbitration and Conciliation

(Amendment) Act, 2015

4. Stephen M. Schwebel, Anti-Suit Injunctions in International Arbitration: An

Overview, in, ANTI-SUIT INJUNCTIONS IN INTERNATIONAL ARBITRATION